PERG 4.11 Link between activities and the United Kingdom

Introduction

Section 19 of the Act (The general prohibition) provides that the requirement to be authorised under the Act only applies in relation to regulated activities which are carried on 'in the United Kingdom'. In many cases, it will be quite straightforward to identify where an activity is carried on. But when there is a cross-border element, for example because a borrower is outside the United Kingdom or because some other element of the activity happens outside the United Kingdom, the question may arise as to where the activity is carried on. This section describes the legislation that is relevant to this question and gives the FSA's views on various scenarios.

Even if a person concludes that he is not carrying on a regulated activity in the United Kingdom, he will need to ensure that he does not contravene other provisions of the Act that apply to unauthorised persons. These include the controls on financial promotion (section 21 (Financial promotion) of the Act) (see PERG 8 (Financial promotion and related activities)), and on giving the impression that a person is authorised (section 24 (False claims to be authorised or exempt)).

if the borrower (and each of them, if more than one) is an individual and is normally resident overseas. In the case of arranging a variation of, or administration of, an existing regulated mortgage contract, each borrower must be an individual who was normally resident overseas when he entered into the contract. In the FSA's view, normal residence for the purposes of this exclusion envisages physical presence with a degree if continuity, making allowance for occasional temporary absences (e.g. holiday). An overseas person under article 3 of the Regulated Activities Order (Interpretation) is a person who carries on certain regulated activities albeit not from a permanent place of business maintained by him in the United Kingdom.

the steps involved in collecting or recovering payments will generally include giving notice to the borrower at his UK address;

(4)

legal action to recover sums due under regulated mortgage contracts will in many cases require proceedings before courts in the United Kingdom, either to enforce regulated mortgage contracts subject to the jurisdiction of these courts or to register and enforce judgements obtained elsewhere, in the case of contracts subject to non-UK jurisdictions; and

(5)

of the existence of the exclusion in article 72(5E) (Overseas persons).

E-Commerce Directive

The E-Commerce Directive removes restrictions on the cross-border provision of services by electronic means, introducing a country of origin approach to regulation. This requires EEA States to impose their requirements on the outward provision of such services and to lift them from inward providers. The E-Commerce Directive contains only a few exceptions, termed derogations, from this principle. The E-Commerce Directive defines an e-commerce service (termed an information society service) as any service, normally provided for remuneration, at a distance, by electronic means, and at the individual request of the recipient of the service. So, for example, it includes services provided over the internet, by solicited e-mail, and interactive digital television.